Reid-Kyl Bill Faces Constitutional Hurdle

Just another small hurdle in its way: the Reid-Kyl bill may be unconstitutional.

That’s the opinion of former U.S. solicitor general Paul Clement, who notes that serious doubts over the bill’s constitutionality remain.

The plan to penalize offshore operators that served the U.S. after the passage of the UIGEA in 2006 “raises serious due process concerns,” Clement wrote in a five page memorandum.

The “penalty box” provision would prohibit offshore operators from applying for an online poker license for five years.

That makes the proposed legislation a bill of attainder, declaring a person or group guilty without privilege of a judicial trial.

“It was difficult to view the 2010 act’s exclusion of those who previously provided Internet poker services as anything other than punitive, and thus the legislation may have amounted to an unconstitutional bill of attainder,” Clement said.

Constitutionality concerns were raised in response to a request by the Poker Players Alliance for Clement to review the bill.

Clement isn’t claiming that companies weren’t flouting US law; he’s arguing that to fence them out without the due legal process is unconstitutional.

“Cutting off prior providers from the newly regulated market deprives them of the expectation that they would have been able to participate in that market, raising serious due process concerns,” he said. “No notice or hearing is required to accomplish that deprivation—the 2012 act’s passage completes the task.”

Clement also highlighted that language in the current Reid-Kyl bill tramples upon states’ rights, as the opt–in/opt-out process interferes with the decision making process.

“While allowing a state to decide to participate in the federal licensing scheme through the state’s normal legislative process respects state sovereignty and longstanding principles of federalism, mandating that ‘a majority of a quorum of each chamber of the legislature’ is all that is require to opt in or out disregards both,” Clement wrote.

“State constitutions—not federal legislation—should dictate the process by which laws are enacted at the state level.”

Clement, who specializes in constitutional law, served as U.S. solicitor general from June 2005 until June 2008. Earlier this year, he petitioned before the Supreme Court to overturn the Patient Protection and Affordable Care Act (aka ObamaCare). He also represented payment processor Chad Elie.